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SEC Filings

10-Q
IHS MARKIT LTD. filed this Form 10-Q on 03/26/2019
Entire Document
 

aM, we issued equity interests in aM’s immediate parent holding company to aM’s founders and certain employees. We will pay cash to acquire these interests over the next five years based on put/call provisions that tie the valuation to underlying adjusted EBITDA performance of aM. Since the purchase of the remaining 22 percent of the business requires continued service of the founders and employees, we are accounting for the arrangement as compensation expense that will be remeasured based on changes in the fair value of the equity interests; we have classified this expense as acquisition-related costs within the consolidated statements of operations and we have classified the associated accrued liability as other accrued expenses and other liabilities within the consolidated balance sheets. We currently estimate a compensation expense range of approximately $150 million to $175 million, to be recognized over a weighted-average recognition period of approximately 3.5 years.

The following table provides a reconciliation of the acquisition-related costs accrued liability, recorded in other accrued expenses and other liabilities, as of February 28, 2019 (in millions):
 
Employee
Severance and
Other
Termination
Benefits
 
Contract
Termination
Costs
 
Other
 
Total
Balance at November 30, 2018
$
2.5

 
$
16.8

 
$
68.7

 
$
88.0

Add: Costs incurred
2.8

 
0.1

 
20.4

 
23.3

Revision to prior estimates

 
(0.1
)
 
(0.4
)
 
(0.5
)
Less: Amount paid
(1.9
)
 
(1.8
)
 
(7.4
)
 
(11.1
)
Balance at February 28, 2019
$
3.4

 
$
15.0

 
$
81.3

 
$
99.7


As of February 28, 2019, the $99.7 million remaining liability was primarily in the Transportation segment, with the remainder in the Financial Services segment and in shared services. Approximately $79.4 million of the remaining liability is associated with the aM acquisition-related performance compensation liability. We expect that the significant majority of the remaining liability will be paid within the next 12 months.

6.
Stock-based Compensation

Stock-based compensation expense for the three months ended February 28, 2019 and February 28, 2018 was as follows (in millions):
 
Three months ended February 28,
 
2019
 
2018
Cost of revenue
$
17.3

 
$
18.0

Selling, general and administrative
42.4

 
43.9

Total stock-based compensation expense
$
59.7

 
$
61.9

No stock-based compensation cost was capitalized during the three months ended February 28, 2019 and February 28, 2018.
As of February 28, 2019, there was $321.2 million of unrecognized stock-based compensation cost, adjusted for estimated forfeitures, related to unvested stock-based awards that will be recognized over a weighted-average period of approximately 2.1 years. Total unrecognized stock-based compensation cost will be adjusted for future changes in estimated forfeitures and expected performance achievement.
Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs). The following table summarizes RSU/RSA activity, including awards with performance and market conditions, during the three months ended February 28, 2019:

16